Martha’s Vineyard Commission (MVC) executive director Adam Turner addressed selectmen on the effects of the short-term rental bill, signed into law by Gov. Charlie Baker in the waning days of December.
Turner was a harbinger of the bill when he met with selectmen in November, but selectmen said they were still in the dark when it comes to the new law. “We know nothing,” selectman Arthur Smadbeck said.
Turner presented selectmen with rough estimates on how much money the new tax would generate for the town. The current room occupancy tax on hotels, bed and breakfasts, and other lodging in Edgartown is at 4 percent. The new short-term rental bill expands that tax to rentals such as Airbnb and VRBO, and allows towns to increase or decrease that tax.
Turner used data from the MVC’s housing production plan, and took half of Edgartown’s estimated seasonal rental units, which is 1,774. Assuming a 4 percent tax on the units being rented for $3,000 a week for a 10-week summer season, Turner estimated the town would generate more than $2 million.
The town can also opt in to a 2.7 percent Cape Cod and Islands Water Protection Fund tax and an up to 3 percent community impact fee.
Smadbeck said the estimates were low, and he expects the town to generate much more.
Turner said he would come back to the town in a month with more accurate estimates so selectmen could make more informed decisions on how to respond to the new law. He recommended anyone unsure about how to implement the law should contact the Massachusetts Department of Revenue.
Selectman Margaret Serpa said any additional decision concerning the bill would be “premature.”
Makenzie Brookes and Steve Ewing, members of the Martha’s Vineyard Housing Bank campaign, met with selectmen to inform them about the potential for an Island-wide Housing Bank.
The Housing Bank is looking to be funded with some of the additional revenue the town can generate through the new rental tax bill. Members of the campaign are proposing a warrant article for the upcoming annual town meetings.
Turner sent a draft of the proposed Housing Bank legislation to town counsel Ron Rappaport, who asked selectmen if they wanted him to review it, but they again said it would be premature.
“It’s premature to be thinking about rushing this onto the town meeting when we have no idea how we’re going to fund it,” Smadbeck said.
In other business, selectmen reappointed James Joyce as their representative to the Martha’s Vineyard Commission.